Non-Qualified Retirement Plan

A non-qualified retirement plan is an employer-sponsored retirement savings plan that does not meet the requirements of the Employee Retirement Income Security Act (ERISA) and IRS guidelines—meaning it can be selectively offered to key executives or high-earning employees, offers greater flexibility, and isn’t subject to annual contribution limits like qualified plans such as 401(k)s. These plans allow employees to defer compensation or receive specialized benefits, such as through deferred compensation arrangements, executive bonus plans, or split-dollar life insurance, but do not provide the same immediate tax advantages for employers and may not offer creditor protection or rollover options upon job change. Taxes are typically deferred until the benefits are distributed to the employee, usually in retirement.